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Two worth reading


Two differing but complimentary books by two high profile economists which whilst overlapping in many ways, often come to similar conclusions.

Stiglitz is probably the more recognisable figure and certainly his views are founded on pure politics. He is more concerned about the effects of “inequality” whilst Kay disseminates a system which he believes is simply not serving wider economy.

So what are the conclusions they draw and more importantly what suggestions are made?

Kay is certainly very scathing about the functions, ethics and objectives of the present banking industry. Fundamental to this is the belief that banking is simply disinterested in supporting genuine wealth creation and is more concerned with mutual trading in the finance bubble. When you consider that just 3% of the banking industries balance sheet is lending to wider industry, then you can appreciate why, although there is my question of whether looser credit is automatically justified. However he does strongly make the very valid point that  talent is being used largely to simply trade in lucrative but essentially pointless activities. Furthermore he rightly highlights bankings failure to truly understand the businesses they are supposedly supporting and rightly highlights this as an unwelcome trend. One that is ironically exacerbated by the rise of the peer to peer lenders

Stiglitz also makes a similar point questioning quite what satisfaction bankers get from roles that contribute zero to the wider economy let alone society.

Kay sticks rigidly to the banking industry and writes beautifully often using dry scathing humour as well as some excellent analogies. Stiglitz is also exceptionally readable and accessible but tends towards polemics. The Great Divide is actually a collection of articles with introductions and this can lead to a fair degree of repetition.  A slimmer volume would have been preferable and more manageable.

Solutions are offered but there is the remaining and somewhat alarming prospect that the lessons of 2008 simply haven’t been absorbed. Both books are often riveting reads for anyone interested in the business of finance.


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